No business is an island. Your company exists within a network of customers and suppliers, and it is connected to other companies that sell similar goods and services — your industry. Understanding your industry is just as important as knowing how your own company is doing. The quickest way to get information about your industry, including trends and forecasts, is to download an industry profile.
An industry profile provides a snapshot of a specific business industry based on data that includes trends and areas of growth.
Industry profiles have several uses for business owners, particularly if you're thinking of starting a new business or expanding a business. Investors also use industry profiles to explore opportunities, as do job seekers who are looking to move to a new industry before investing in new training or education.
A good profile should tell you the size of the industry compared to the size of the market and how well the industry as a whole is doing. If you're thinking of starting a clothing business, for example, you should understand the strength of the apparel industry and what areas within that industry are expected to grow.
Analysts review the data of hundreds or often thousands of different companies within an industry. They combine that information to give an overview of the industry as a whole on a national or sometimes global level. Even if your business is stable, it helps to understand trends and upcoming changes in your industry. Will customers still want your products next year? Will suppliers still be producing them?
There are several places you can get industry profiles, and the format will vary from one source to another. These can range from a free one-page summary to a comprehensive 20-page report including information on competitive landscape, industry opportunities, business and technological strategies, financial analysis and more. Some industry profiles are designed for job seekers, while others are written for business owners or investors.
Most organizations offering industry profiles use the North American industry classification system for organizing industries. Each specific industry will have a four- to six-digit code identifying it. The first two digits identify a broad industry sector, while the remaining digits identify specific industries within that sector. For example:
- 31 to 33: Manufacturing
- 3111: Animal Food Manufacturing
- 311111: Dog and Cat Food Manufacturing
- 311119: Other Animal Food Manufacturing
If you were starting a dog food company, 311111 identifies that specific industry. Information about animal food manufacturing (3111) and manufacturing (31) would also apply to dog food manufacturing in a broader sense. An industry profile beginning with code 33, however, would apply to metal manufacturing and wouldn't be relevant to your business.
Industry profiles can be found for free, for purchase or for a subscription from a variety of sources online. If you're a member of a professional association, it may also offer profiles on its related industries. In addition to profiles, many of these organizations also offer market analysis and profiles of specific companies. Some resources offering this information include:
- Bureau of Labor Statistics: The U.S. Bureau of Labor Statistics provides industry profiles with a focus on labor, including wages, employment demand and expected employment growth
- First Research: Provides comprehensive industry profiles for the U.S. and other countries
- IBISWorld: Offers comprehensive industry profiles for about 700 different industries in the U.S
- MarketLine: Offers annual industry profiles for industries in the U.S. and several other countries
- Euromonitor Passport: Provides industry profiles for foreign countries
- Valuation Resources: A free guide to industry profiles, research and analysis for about 400 different industries
- Value Line: Provides one-page profiles for industries in 100 categories, which are updated quarterly